Coinbase founders Fred Ehrsam and Brian Armstrong.
(Picture: PA / ES composite)The chief executive of US cryptocurrency exchange Coinbase has launched a broadside against the Securities and Exchange Commission (SEC), accusing it of unfairly targeting his business and selectively enforcing rules.
Brian Armstrong attacked the conduct of the US SEC and its chairman Gary Gensler in a 500-word tweet storm on Tuesday morning, accusing the regulator of “sketchy behavior”.
Armstrong said the regulator had blocked his company from launching a crypto lending product and threatened to sue Coinbase if it continued to draw up plans.
The intervention comes despite the fact that several other crypto companies already offer similar products. Armstrong accused the regulator of stonewalling Coinbase and creating an “unfair market” by selectively enforcing rules.
“They are refusing to offer any opinion in writing to the industry on what should be allowed and why, and instead are engaging in intimidation tactics behind closed doors,” he tweeted. “If you don’t want this activity, then simply publish your position, in writing, and enforce it evenly across the industry.”
Armstrong said Coinbase was willing to go to court to fight the SEC if that’s what it took to gain clarity on the rules. The SEC has been approached for comment.
The SEC’s action is part of a global crackdown by financial regulators on the cryptocurrency industry. Both the SEC and the UK’s Financial Conduct Authority have called for more powers to crackdown on the industry. New SEC chairman Gary Gensler has said consumer protection in the crypto space is one of his top priorities.
Coinbase shares were down 3% in the pre-market in New York. It coincided with a more than 10% slump in the price of bitcoin.
Coinbase became the first cryptocurrency exchange to go public in April when it successfully pulled of a $65bn listing on New York’s Nasdaq.
